The Financial Details of Purchasing a Home

Congratulations! You have found your dream home, submitted an offer, and had it accepted. Your financing is in place. Now you cancel your lease and are ready to move into your new place. Suddenly you are informed that there are issues and closing is delayed. This can be a hassle and cost you significant money if you have to find a place to live or need to rectify these new issues. Here are a few of the things that you need to pay attention to when setting the closing date.

Home inspection.  Failing a home inspection results in two possible outcomes:

1. You ask the seller to reduce the price and you will fix the problem (if lender will allow).
2. Neither the price alteration nor the repair happens, and the deal falls through.

What you need to do to prevent this is have the inspection done at the very first possible moment. This will allow you time to address any issues with the inspection much quicker and keep you on track.

Appraisal issues.

Banks do not wish to overpay for a home; remember you are using their money to buy the home. In this situation the value of the home is coming in significantly less than what the market is paying. You have a few remedy options to explore. You can have a second appraisal done as they may have missed something the first time. Or, the bank may request that the seller lower their price or you the buyer put more money down on the home to bridge the disparity in value.

Either way, you want to make sure you have done your own research before making an offer on a home. To avoid this issue, check the comparable prices in the neighborhood and make a reasonable offer.

Clouds on the title.

Nothing will rain on your day like an imperfect title. Any liens, judgments, or claims to the property must be resolved before there is a transfer. What this means to you is that you need to do a title check before making an offer. Most titles will have a few clouds on them, which is OK. You just have to make sure that they will all be cleared upon transfer. For example, if the seller still owes their bank money on the home, then there is a lien. However, upon sale the money is transferred into escrow and before the transfer takes place the lien is cleared. Lesson here is making sure all issues associated with the title will be cleared in escrow.

Paperwork.

There is plenty of paperwork required for the purchase of a home. Be proactive and make sure you read everything and fill out all that is required. A missed signature or initial can cause delays further down the line.

Many obstacles can slow or impede your closing. The best thing you can do is to be as thorough as possible and not procrastinate. This will provide you with ample opportunities to resolve issues and relieve stress caused at closing.

Give us a call as you proceed through your closing, so we can help make sure it goes as smoothly as possible, with few financial hang-ups.

Do you have questions?

Count on our experienced team at Ericson, Scalise & Mangan, PC to provide you with sound guidance for your Estate Planning, Elder Law, Real Estate, Probate, Trust & Estate Administration, and other legal needs. For assistance, contact us today at 860-854-3809, or email us at info@esmlaw.com.